Costco is known for bulk groceries, discounted household essentials, and its popular Kirkland Signature products. But the warehouse club is also making waves in a different business: cruise vacations.
Costco sent more than 750,000 members on cruises during fiscal 2026, a 16% increase from the previous year, according to the company’s most recent earnings call.
The growth came as Costco continued expanding its travel offerings and attracting members with vacation packages that emphasize value.
The results are particularly notable because Costco Travel is competing in an industry experiencing record demand. They also demonstrate how Costco can extend its membership value beyond the warehouse and give customers another reason to renew.
Costco is tapping into a booming cruise industry
The cruise industry has plenty of momentum behind it.
A record 37.2 million passengers took ocean cruises worldwide in 2025, according to the Cruise Lines International Association, and about 90% of surveyed cruisers said they intended to sail again.
“Cruising is sailing toward the future with exceptional momentum and strength,” said Bud Darr, president and CEO of CLIA. “Record demand, growing interest from new cruisers and sustained confidence in the cruise experience are being matched by innovation, technological advancements, and destination partnerships.”
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The industry’s growth provides a favorable backdrop for Costco, though the company’s results also extend beyond cruises. Management said vacation packages, cruises, and car rentals all grew by double digits during fiscal 2026.
“Our Costco Travel business continues to add exciting new packages and worldwide destinations,” said CEO Ron Vachris.
That expansion gives members more opportunities to book trips through a retailer they already trust for competitive prices on everyday purchases.
The scale of Costco’s cruise business is striking, too.
During the earnings call, management highlighted one member who booked a 154-night Regent Seven Seas cruise costing more than $218,000. The customer will receive an $8,800 Costco Shop Card at the conclusion of the trip.
The booking illustrates how Costco Travel can appeal to customers across a wide range of vacation budgets, from conventional cruises to expensive, extended luxury voyages.
It also shows how the retailer can use member rewards to make even high-priced travel purchases more attractive.
A smart play for Costco
Costco’s travel business fits neatly into the company’s broader strategy of making memberships worthwhile through savings and exclusive perks.
Many of Costco’s travel packages include digital Costco Shop Cards, resort or shipboard credits, and additional benefits. Those perks can make a meaningful difference on expensive vacations.
Executive members also earn an annual 2% reward on eligible Costco Travel purchases after travel is completed, subject to exclusions and a $1,250 annual cap.
The potential savings are especially relevant as travelers look for ways to stretch their vacation budgets without giving up the experiences they want.
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Costco’s model offers another advantage: It connects travel spending with a membership customers already use for groceries, gasoline, and household goods. That creates opportunities to demonstrate value throughout the year, rather than relying solely on warehouse purchases.
The strategy also supports Costco’s efforts to keep members engaged and encourage renewals. The more ways customers can use their memberships, the more reasons they have to maintain them.
Cruises are particularly well suited to this approach because they often involve substantial up-front spending. A package that includes additional credits or rewards can make a booking through Costco appealing to members comparing competing offers.
Plus, with global cruise demand soaring and repeat interest remaining strong, Costco now has a favorable market to expand its offerings.
Maurie Backman owns shares of Costco.
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